Monday, 11 August 2014

Markets | 11/08/2014 | Wall Street is likely to continue recovery

Bargain hunters and Friday's strong close on Wall Street have combined to very much set the pace for equity markets across Asia during the first session of the new trading week. There's still the issue of the ongoing geopolitical uncertainty in Ukraine, Iraq and Israel, but at least for the time being traders appear to be comfortable putting this to one side. However in the event of any clear escalation, the positive sentiments that we're seeing could easily be eradicated. The Nikkei found itself very much as the winner on the day, closing almost 2.5% higher with the Yen's rebound from Friday's highs also helping here, but all the major indices have finished higher.

This is helping Wall Street point towards some modest gains at the open although upside is looking rather limited - the solid rally on Friday has presumably absorbed the bulk of the momentum and we have a very quiet day ahead in terms of economic news. There's another round of earnings releases due, although the bulk of these are relatively low key, too. The gains we're eyeing at the open may look relatively modest but at least there's hope that the move lower we saw last week isn't the start of the much talked about correction. Ahead of the open we're calling the DOW up 27 at 16581 and the S&P up 2 at 1934. 

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